EPFO – If you are an EPF member, you can benefit from a monthly pension in your old age. The central government runs the EPS for EPF members, providing monthly pension benefits. If you want to take advantage of the Employee Pension Scheme, you must first understand a few important things.
Employees contribute 8.33% of their employee’s salary to the EPS every month. The maximum limit is up to ₹15,000. Pension is paid based on the amount deposited in the EPS account. The age at which a pension is payable is also fixed.
Pension after how much service?
After retirement, the employee receives a monthly pension benefit from the amount deposited in the EPS account. The EPFO organises the EPS. For this, the employee must retire at the age of 58. This means that the employee must have been an EPS member for at least 10 years.
As per the rules, the employee becomes eligible for a pension even at the age of 50. This amount will be less than the actual pension. If an employee leaves the job before ten years, they will no longer be eligible for the Employees’ Pension Scheme. The money deposited in their EPS account will be disbursed upon retirement. The amount deposited in the account is disbursed to the employee upon retirement.
Learn how the pension amount is determined.
There is a separate formula for determining the pension amount under EPS. For this, the pensionable salary is multiplied by the pensionable service. The result is then divided by 70. Pensionable salary is the basic salary of the last 60 months.
Pensionable service refers to the total number of years an employee has served. This means that the longer an employee works, the higher their pension. Simply put, the longer the service, the higher the pension.
Demand for increasing the minimum pension amount
Calls for increasing the minimum pension amount under EPS are quite high these days. The government may increase the minimum pension amount under EPS to Rs 4,500. Currently, the minimum pension amount is only Rs 1,000.